the singapore exchange closes flat on low volumes 210782015

Singapore shares managed to end in positive territory by just a whisker on Monday as investors sat on the sidelines awaiting a resolution of the Greek crisis. However, rising oil prices boosted the energy sector. Traders’ attention was drawn to the goings-on in Noble Group, which has come under fire from short-seller Ice Research for alleged accounting impropriety, and United Engineers, which was dumped by investors following the failure of its acquisition by a Thai billionaire.

Indices and sectors

The Straits Times Index (STI) ended 0.94 points higher or +0.03 per cent to 3,427.16, taking the year-to-date performance to +1.84 per cent. The FTSE ST Mid Cap Index declined -0.43 per cent, while the FTSE ST Small Cap Index declined -0.50 per cent.

The SGX traded 927.3 million shares valued SG$1,029.2 million. Losers outnumbered gainers by 228/164.

Amongst the FTSE ST sectors, the top gainers were telecommunications (+1.76 per cent), oil and gas (+2.1 per cent) and real estate (+0.02 per cent). The biggest losers were healthcare (-1.29 per cent), maritime (-1.25 per cent), industrials (-0.88 per cent) and basic materials (-0.81 per cent).

Stocks

Property developer City Developments Ltd (SGX:C09) said its net profit quarter ended December 31 and revenue during the full year ended on that date were the highest ever since the company’s inception in 1963. Net profit in the fourth quarter jumped 73.4 per cent to SG$384.9 million compared to the year ago period, due mostly to the unique financing transaction it implemented for its Sentosa Cove assets. Full-year revenue jumped 17.1 per cent to SG$3.8 billion, while full-year net profit was higher by 12.2 per cent to SG$769.6 million.

Raffles Medical Group Ltd (SGX:R01) reported that net profit for the full year 2014 was down 20.3 per cent from SG$84.9 million to SG$67.6 million, even though revenue jumped 9.9 per cent to a record figure of SG$374.6 million. The company said the increased turnover was contributed by all its divisions, particularly health care and hospital services, which grew revenue by 12.5 and 8.4 per cent respectively.

Shares in Noble Group Ltd (SGX:N21) crashed 7.88 per cent to SG$1.11 even though the company rejected the allegations of improper accounting practices by Iceberg Research, which said in a report that Noble “exploited the accounting treatment of its associates to avoid large impairments and fabricate profit.”

“The company completely rejects the allegations. All material information to which Iceberg Research refers is in the public domain. There has been no material adverse change since the company last reported,” the company said in a statement filed with the Singapore Exchange, after the latter asked for an explanation for the company’s unusual share price move, and reported by TODAY. The developments on the stock are reminiscent of the short attack mounted in 2012 on Olam International Ltd (SGX:O32) by noted short-seller Muddy Waters.

Shares of United Engineers Ltd (SGX:U04) plunged by 15.46 per cent to SG$2.68, the largest decline in its history of 17 years after the failure of a transaction for the acquisition of the company by Thai billionaire Charoen Sirivadhanabhakdi.

Shipbuilder Cosco Corporation (Singapore) Ltd (SGX:F83) said net earnings dropped 32 per cent to SG$20.9 million, although revenue for the year ended December 31 rose 21 per cent to SG$4.26 billion including turnover from shipyard operations of SG$4.2 billion, which was up 21.9 per cent according to the Straits Times.

REIT manager ARA Asset Management Ltd (SGX:D1R) said net profit for the year ended December 31 was up 18 per cent to SG$87.5 million with revenue up 23 per cent to SG$173.1 million. As at December 31, it had assets under management of SG$26.3 billion and achieved an internal rate of return of over 27 per cent, according to the Straits Times.

Economic news, currency and insight

According to data from the Department of Statistics, released yesterday, a study of real (post-inflation) earnings of households during 2014 showed that the median monthly household income from work grew 4.1 per cent to SG$8,290, recording the highest increase in real income since 2011. Significantly, inequality remained basically unchanged from 2013, the study found, as the Gini coefficient printed at 0.464 in 2014 versus 0.463 in 2013. According to TODAY, experts attributed the growth in income to wage increments arising from a tight labour market.

According to data from the National Population and Talent Division, both birth and marriage rates increased in Singapore in 2014, as reported by Xinhuanet. The number of marriages grew 10 per cent over 2013 to 24,000, the highest number since 1997, while the number of births jumped from 31,000 in 2013 to 33,000 births in 2014. The total fertility rate rose to 1.25 from 1.19 in 2013.

The Monetary Authority of Singapore issued a consultation paper setting out proposals that would make it easier for companies to access alternate sources of funding through securities-based crowdfunding, according to TODAY. The proposals primarily address lending-based and equity-based crowdfunding, which involve the offer of securities in the form of debt instruments or shares and are therefore subject to securities regulation. “These proposals seek to strike a balance between facilitating investments in start-ups and small businesses and ensuring that there are sufficient safeguards for investors,” said MAS Assistant Managing Director, Capital Markets, Mr Lee Boon Ngiap.

IE Singapore said yesterday that nearly 50 per cent of local small and medium-sized enterprises now boast offshore revenue, allowing them to improve productivity, gain access to more resources and build new business capabilities, as reported by Channel News Asia. IE Singapore said that it assisted 28,000 companies with their overseas ventures in 2014, a 5 per cent jump from the previous year. Of these, 80 per cent were SMEs.

According to data from the Urban Redevelopment Authority, a total of 372 new homes were sold in January, up 62 per cent from the 230 units sold in December which was the lowest since January 2009. The data shows an improvement in the fortunes of the private housing market, though overall activity was hampered by the cooling measures implemented by the government. However, Mr Nicholas Mak, executive director of research and consultancy at SLP International Property Consultants, attributed the pickup in sales volume due to market participants being away for holidays in December.

According to Channel News Asia, economists are estimating that Singapore’s budget for FY 2014 could report a surplus, against the government’s projections of an overall budget deficit of about SG$1.2 billion. "In terms of the fiscal picture, it still looks fairly healthy as far as operating revenue is concerned, because the first nine months of FY2014, we are still running at close to 8 per cent above trend," said Ms Selena Ling, head of Treasury Research and Strategy at OCBC, which is projecting the surplus at around SG$1.3 billion. According to United Overseas Bank, the surplus could be around SG$390 million, while DBS Bank estimates it could be in the range of SG$1.9 billion.